UCI Mountain Bike World Cup series 2018 to boost Cape’s tourism coffers
CYCLING events in the Cape boost the economy to the tune of more than R1 billion per annum, and 2018 sees an inaugural race taking place in Stellenbosch – the UCI World Cup series is kicking off the season there for the first time.
These events collectively attract thousands of local and international competitors and their supporters, who often spend extended stays in the destination, so it’s imperative that big sporting events continue, albeit with renewed focus on saving water. Water is an unavoidable part of the tourism sector’s narrative in the Cape as well as other parts of the country dealing with an increasingly scarce resource that requires long-term management strategies to ensure sustainability in tourism.
Besides the UCI World Cup series, the Cape is host to cycling events that generate an enormous amount for the region. Cape Town Cycle Tour, for example, is one event that gets the country talking, the world’s biggest individually-timed cycling race with 35 000 participants, 4 000 of whom are international visitors.
The peninsula’s roads are a pleasure to traverse on road and mountain bikes. That race alone brings more than R500 million, and it does wonders for getting locals and visitors amped about taking to the roads and trails on two wheels.
Of course, the unprecedented cancellation of the 2017 event shows that endurance sports are particularly vulnerable to many factors (wind, fire, etc), although this is sometimes part of the challenge for those thrill seekers out there.
This year, the Cape Town Cycle Tour is tackling the water shortages with responsible measures designed to combat any impact taking place on the city’s resources, including sourcing water from places with plenty. This, combined with the efforts across the hospitality trade, including those made by hotels, will reduce the impact, while allowing this world-class event to carry on, so that the millions it generates will not be lost to the city.
The Absa Cape Epic contributed R300m to the economy in 2016, with 600 teams of two tackling the 700km route, attracting the globe’s elite riders as well as amateurs who take the lottery to get a place.
Not to be left out, Cape Rouleur attracts 160 pro, former pro, celebrity, and amateur riders from 16 countries across Africa, America, Australasia and Europe.
Events are just part of this contribution to the economy; local cyclists contribute to a niche industry of their own, with cycling stores enjoying brisk business.
Head out on any of the city’s coastal roads over the weekend and you’ll see thousands of cycling enthusiasts riding and in training, many of whom stop off at restaurants for slap-up breakfasts.
The Union Cycliste Internationale (UCI) is the world governing body for cycling as recognised by the International Olympic Committee, so it’s an official event that will allow for even more exposure on the global sporting stage. Their mission is to develop and promote cycling as a competitive sport, a healthy recreational activity and as a means of transport around the world – something that could easily gain traction in SA, where cars and trucks dominate the roads. We’ve seen some progress in the creation of dedicated cycle lanes on public roads, so that’s in our favour.
Benefits The hospitality industry benefits greatly from these two-wheeled adventurers, with hotels and other places of accommodation across the city noting an uptick in bookings before, during and after such events. Head to Cape Town International Airport to check out the volumes of bicycle arrivals that take place during the Cape Town Cycle Tour and you’ll get the picture.
Savvy businesses will tap into this with accommodation packages, for example.
It’s great that the UCI event is taking place in Stellenbosch this year; the dorp could do with the added tourism footprint. It’s known as the home of wines in SA, but there’s plenty more going on there, especially for the large student population.
We’re hoping that new events will be created and that older ones will gain traction – they’re fantastic for tourism, as they generate visitors all year round, and that’s a central element to ensuring sustainability in tourism. We cannot afford to put all of our hopes into the summer season, and events aid in spreading the tourism rand wider.
If you have noted an increase in cyclists on the road, bear in mind that what may be a passion or a hobby to them is providing employment to others across the city – let’s ensure that this contribution to the tourism life cycle continues.
Changing strategy
Danny Bryer is area director of Sales, Marketing and Revenue Management, Protea Hotels by Marriott. Hudaco is still embracing its seven-yearold plan of cutting its mining exposure in favour of retail consumables. In 2010 consumable engineering products contributed 67 percent, in 2016 just over 50 percent, and 2017 saw it coming down to 39 percent of profit. Although the mining and manufacturing sectors declined over the past 10 years, this division still generated cash.
The company spent R210 million on acquisitions in the past year, yet also repaid R45m of bank borrowings. Hudaco’s consumer division contributed 61 percent of operating profit.
Rutherford, a distributor of power tools and garden equipment, had an excellent year and moved to a larger distribution centre, which should improve efficiencies, according to chief executive Graham Dunford.
Prospects Hudaco is a quality company that boasts a consistently high return on equity, decent operating margins and strong cash generation historically. The share does not seem expensive, trading at a forward price/ earnings ratio of around 11 times, and two times its net asset value. The share price is also underpinned by a healthy dividend yield of 3.6 percent.
Over the past two years the group has right-sized its operations to lower activity levels. Currently, Hudaco seems well positioned to benefit from an improvement in mining and manufacturing activity.
We remain optimistic that earnings will be supported by improved commodity prices. The group has a widely diversified customer and product base, which should assist in stabilising earnings.
Extracting operating efficiencies and synergies from recent acquisitions will also support earnings growth.